Katy Industries Eyeing Acquisitions To Double Size

August 24, 1994|By David Young, Tribune Staff Writer.

Katy Industries Inc. is seeking to acquire five to eight companies that would enable it to double in size in the next 18 months, company officials told shareholders Tuesday at their annual meeting in Elgin.

John R. Prann Jr., Katy's president, did not disclose which companies have been targeted, although he said they are in businesses similar to some of Katy's 18 current subsidiaries.

Despite paying a controversial $126 million special dividend to shareholders last month, in part to reduce the company's value to raiders, the company has $45 million in cash and marketable securities available for acquisitions.

The acquisitions are part of Prann's strategy to convert Katy from the equity-based holding company assembled by investor Wallace E. Carroll into an earnings-based diversified manufacturing company.

Carroll's heirs still own more than half the stock in publicly traded Katy, having thwarted a legal effort by a New York investment group and some minority shareholders this year to reduce the Carrolls' holdings and dilute their control.

Some minority shareholders at Tuesday's meeting attempted to elect a member to the vacant position on the 12-member Katy board, but they abandoned the effort when it became clear they could not win.

"It was symbolic," said Jim Morrow, a private investor from Barrington who briefly sought election to the board.

His nomination sent company officials scrambling to type new ballots and delayed the meeting for 30 minutes, because the nomination from the floor invalidated all the proxies that had been submitted. They represented about 85 percent of the shares outstanding.

To block Morrow's election, Wallace E. Carroll Jr., a director standing for re-election, nominated from the floor his cousin Daniel Carroll, who had flown to the meeting from his home in Massachusetts. Daniel Carroll was later appointed to the board by the other 11 directors elected at the meeting.

Three members of the Carroll family-Wallace Jr., Lelia and Denis-appeared on the ballot and were elected to the board.

Prann predicted that with the planned acquisitions, Katy's revenues would double to $300 million by 1996.

The annual meeting probably was Katy's last in Elgin, because it plans to move its headquarters to Denver on Sept. 1.